UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER
30, 1995.
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
_____________________________ TO
_________________________________.
Commission File Number: 0-17773
___________________________ATS Money Systems,
Inc._______________________
(Exact name of small business issuer as specified in its
charter)
____________Nevada_____________
___________13-3442314__________________
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporation or organization)
25 Rockwood Place________Englewood, New
Jersey________07631______________
(Address of principal executive offices)
(Zip Code)
________________________201/894-1700_____________________________
______
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. __X__Yes _____No
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
As of November 2, 1995, - 5,723,970 shares of common stock,
$.001 par value.
Exhibit index on sequentially numbered page __12________.
Total number of pages ___13_______.
<TABLE>
<CAPTION>
PartI. FINANCIAL INFORMATION
Item I. Financial Statements
ATS MONEY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30 DECEMBER 31
ASSETS: 1995 1994
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 429,997 $ 527,369
Trade accounts receivable, less allowance
for doubtful accounts of $142,705 in 1995
and $192,702 in 1994 1,297,311 855,844
Inventories 728,914 617,796
Prepaid service contract costs 207,874 33,491
Prepaid expenses and other current assets 210,455
74,647
Total current assets 2,874,551 2,109,147
PROPERTY - At Costs:
Office furniture 52,912 34,257
Office machinery and equipment 91,790 85,066
Subtotal 144,702 119,323
Less accumulated depreciation 62,057 48,614
Property - net 82,645 70,709
OTHER ASSETS:
Software costs, less accumulated amortization
of $391,775 in 1995 and $345,805 in 1994 548,769 529,983
Software license agreement net of 62,500
-
accumulated amortization of $37,500
Deposits 50,322 22,477
Total other assets 661,591 552,460
TOTAL ASSETS $ 3,618,787 $ 2,732,316
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 198,847 $ 239,784
Accrued expenses and taxes 502,072 228,904
Deferred revenue 614,112 323,541
Customer deposits 177,500 -
Other liabilities 32,150 23,105
Total current liabilities $ 1,524,681 $ 815,334
LONG TERM LIABILITY:
Deferred Credit, less accumulated amortization
of $32,082 in 1995 and $10,742 in 1994 253,086 274,425
STOCKHOLDERS' EQUITY:
Common stock - $.001 par value, 25,000,000
shares authorized, 5,827,795 shares issued
at September 30, 1995 and 5,820,141 shares
issued at December 31, 1994 5,828 5,820
Additional paid-in capital 2,317,679 2,315,535
Accumulated deficit ( 482,387) ( 678,698)
Treasury stock - 100,000 shares at par value ( 100)
( 100)
Total stockholders' equity 1,841,020 1,642,557
TOTAL $ 3,618,787 $ 2,732,316
See notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
ATS MONEY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
SEPTEMBER 30 SEPTEMBER 30
1995 1994
<S> <C> <C>
REVENUE:
Equipment and systems sales $ 1,572,095 $ 1,143,196
Equipment maintenance and service revenue 599,998
438,288
Total revenue 2,172,093 1,581,484
COST AND EXPENSES:
Cost of goods sold and service expense:
Equipment and systems 689,686 464,757
Equipment maintenance and service 199,826
152,014
Selling, general and administrative expenses 1,406,309
824,520
Total costs and expenses 2,295,821
1,441,291
(LOSS) INCOME FROM OPERATIONS (123,728) 140,193
INTEREST INCOME 5,369 839
(LOSS) INCOME BEFORE INCOME TAXES (118,359)
141,032
INCOME TAXES ( 17,545) -
NET (LOSS) INCOME $( 100,814) $
141,032
(LOSS) EARNINGS PER COMMON SHARE:
Primary and fully diluted ( $.02) $.02
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 5,866,347 5,715,970
See notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
ATS MONEY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
SEPTEMBER 30 SEPTEMBER 30
1995 1994
<S> <C> <C>
REVENUE:
Equipment and systems sales $ 4,316,570 $ 2,533,693
Equipment maintenance and service revenue 1,750,944
1,202,009
Total revenue 6,067,514 3,735,702
COSTS AND EXPENSES:
Cost of goods sold and service expenses
Equipment and systems 1,942,118 1,084,828
Equipment maintenance and service 584,263 478,157
Selling, general and administrative expenses 3,288,125
1,929,590
Total costs and expenses 5,814,506 3,492,575
INCOME FROM OPERATIONS 253,008 243,127
INTEREST INCOME 21,303 12,059
INCOME BEFORE INCOME TAXES 274,311
255,186
INCOME TAXES 78,000 -
NET INCOME $ 196,311
$ 255,186
EARNINGS PER COMMON SHARE:
Primary and fully diluted $.03 $.04
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 5,848,233 5,715,970
See notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
ATS MONEY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
SEPTEMBER 30 SEPTEMBER 30
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 196,311 $ 255,186
Adjustments to reconcile net income to cash
provided by (used in) operating activities;
Depreciation and amortization 153,858 100,259
Changes in current assets and liabilities:
Trade accounts receivable - net ( 441,467) 299,244
Inventories ( 111,118) 24,074
Prepaid service contract costs ( 172,789) ( 143,295)
Prepaid expenses and other assets ( 128,769) ( 29,912)
Accounts payable - trade ( 40,937) ( 106,359)
Accrued expenses 265,668 ( 48,896)
Deferred revenue 290,571 271,356
Customer deposits 177,500 0
Other liabilities ( 19,934) ( 49,874)
Net cash provided by operating activities 168,894
571,783
CASH FLOWS FROM INVESTING ACTIVITIES:
Capitalization of software development costs ( 143,040) (
152,762)
Purchase of software license ( 100,000) 0
(Additions to) sale of property ( 25,379) 296
Cost of acquisition including other direct costs __________ (
202,812)
Net cash provided by investing activities ( 268,419) (
355,278)
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of stock options: 2,153 1,072
_________
_________
Net cash used in investing activities 2,153 1,072
_________
_________
NET (DECREASE)INCREASE IN CASH AND
CASH EQUIVALENTS ( 97,372) 217,577
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 527,369 139,303
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 429,997 $
356,880
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ -
$ 3,500
Income Taxes $ 124,507
$ 18,000
See notes to consolidated financial statements.
</TABLE>
ATS MONEY SYSTEMS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
September 30, 1995
Note 1 - Unaudited Information:
In the opinion of management, the accompanying unaudited
financial statements reflect all adjustments (which comprise
only normal recurring accruals) necessary to present fairly the
Company's consolidated financial position as of September 30,
1995, and the results of its operations for the three month and
nine month periods ended September 30, 1995 and 1994 and its
statements of cash flows for the nine month period ended
September 30, 1995 and 1994. Information included in the
consolidated balance sheet as of December 31, 1994 has been
derived from the Company's audited financial statements in its
Annual Report on Form 10-KSB for the year ended December 31,
1994, to which reference is made. Certain information normally
included in financial statements and related notes prepared in
accordance with generally accepted accounting principles has
been condensed or omitted.
Note 2 - Acquisition
On August 25, 1994, the Company, through a newly formed wholly
owned subsidiary, IEI Acquisition Corp., purchased certain
assets and assumed certain liabilities of a subsidiary of
Dynatech Corporation, headquartered in Miramar, Florida. The
subsidiary, which changed its name to Innovative Electronics,
Inc., is in the business of marketing hardware and software
products designed to permit the exchange of pricing, product and
other data among stores within a chain.
The acquisition has been accounted for by the purchase method
of accounting. Accordingly, the assets, liabilities and results
of operations of Innovative Electronics, Inc., are included in
the consolidated financial statements, beginning as of August
25, 1994. The purchase price has been allocated to the assets
acquired and liabilities assumed based on the fair values on the
date of acquisition.
The purchase price of the assets acquired plus certain direct
closing costs aggregated to $204,110. The excess of the
estimated fair values of the assets acquired over the purchase
price ($285,167) has been recorded as a deferred credit, which
is being amortized on a straight line basis over ten (10) years.
The details of the subsidiary acquired and its impact on cash
flow is as follows:
<TABLE>
<S> <C>
Fair value of assets acquired $ 551,963
Liabilities assumed 62,686
Fair value of assets acquired
over liabilities assumed 489,277
Less acquisition costs 104,110
Less excess of net assets acquired
over cash paid 285,167
Cash paid for subsidiary $ 100,000
</TABLE>
Note 3 - Inventories
Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method for machine parts
and specific identification for machines held for sale.
Note 4 - Capitalized Software Costs
The Company capitalizes computer software development costs in
accordance with the provisions of Statement of Financial
Accounting Standards No. 86, "Accounting for the Costs of
Computer Software to be Sold, Leased or Otherwise Marketed".
Costs incurred to establish the technological feasibility of
computer software are expensed as incurred. Costs incurred for
product enhancements, subsequent to establishing technological
feasibility, are capitalized and stated at the lower of cost or
net realizable value. Capitalized costs are amortized using the
straight-line method over five years, which approximates the
estimated remaining useful life of the product. Amortization of
computer software costs amounted to $124,254 and $97,751 for the
nine month periods ended September 30, 1995 and 1994,
respectively and $41,668 and $31,751 for the three month periods
ended September 30, 1995 and 1994, respectively.
Note 5 - Revenue Recognition
Revenue from equipment and systems sales is recognized upon
shipment to the buyer and satisfaction of related obligations by
the Company. Revenue from software licensing is recognized on
delivery of the software if collectibility is probable and any
remaining insignificant obligations of the Company are accounted
for by deferring a pro rata portion of revenue and recognizing
it either ratably as the obligations are fulfilled or on
completion of performance or by recording a current year expense
for the remaining costs associated with completing the project.
Note 6 - Equipment Maintenance and Service Revenue
Equipment maintenance and service revenue is recognized as
earned over the term of the contract, which is generally a
maximum of one year in length. Deferred revenue represents the
unearned portion of equipment maintenance and service fees.
Note 7 - Income Taxes
The Company accounts for income taxes under the provision of
Statement of Financial Accounting Standards No. 109 ("SFAS
109"), "Accounting for Income Taxes".
Deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for income tax purposes, and operating loss carryforwards.
The income tax provision for the nine month periods ended
September 30, 1995 and 1994 consisted of the following
components:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
1995 1994 1995 1994 <S>
<C> <C> <C> <C>
Current Federal and state income tax expense $117,000
$112,000 $(17,545) $ 77,000
Change in valuation allowance from utilization
of net operating loss and credit carryforward (39,000)
(112,000) - (77,000)
Income tax provision $
78,000 - $ (17,545) -
</TABLE>
Note 8 - Stockholders' Equity
Common Stock - The authorized capital stock of the Company
consists of 25,000,000 shares of noncumulative, voting, common
stock, with a par value of $.001 per share.
Common Stock Incentive Plan - In January 1993, the Company
adopted the Common Stock Incentive Plan (the "Stock Incentive
Plan"), approved by the stockholders at the annual meeting in
May 1993, which authorizes the issuance, within ten years, of
options covering up to 280,000 shares of common stock to certain
employees and other individuals of importance to the Company.
On September 27, 1995, the Board of Directors approved, subject
to the stockholders approval at the 1995 Annual Meeting of
Stockholders, an Amendment to the Stock Incentive Plan pursuant
to which the number of authorized shares under the Stock
Incentive Plan would be increased from 280,000 shares to 480,000
shares. The Stock Incentive Plan is intended to provide
incentive for continued employment of certain employees and
other individuals by enabling them to acquire a proprietary
interest in the Company.
Options granted under the Plan may be either "incentive stock
options" or "non-qualified stock options." Incentive stock
options, granted only to certain employees of the Company,
expire within ten years (five years for a 10% beneficial owner
of the Company's securities) from the date granted and are
exercisable from time to time in accordance with the terms of
such options. The exercise price of an incentive stock option
must be at least equal to the fair market value of the common
stock on the date of grant (110% for a 10% beneficial owner of
the Company's securities). Non-qualified stock options can be
granted to certain employees of the Company and advisors and
consultants to the Company. Such stock options are exercisable
on or after the date of grant and the exercise price is not
limited and may be below fair market value.
During 1994, the Company granted 36,000 incentive stock options
(21,000 granted at $1.25 per share and 15,000 granted at
$1.375). Also during 1994, 4,171 of the incentive stock options
were exercised at a price of $.28125 per share. At December 31,
1994, there were 206,829 options outstanding at prices ranging
from $.28125 to $1.375 per share of which 60,372 are currently
exercisable.
As of September 30, 1995, the Company has not granted any
options in 1995 and 7,654 options have been exercised during
1995 at a price of $.28125 per share.
On September 27, 1995, the Board of Directors approved, subject
to stockholders approval at the 1995 Annual Meeting of
Stockholders, the ATS Money Systems, Inc., 1995 director Stock
Plan pursuant to which the Company's non-employee directors,
upon first being elected to the Board, would be granted 10,000
shares of the Company's common stock, and on the date of
election of directors at each annual stockholder meeting
thereafter (if such person continues to serve as a director)
would be granted options to purchase 5,000 shares of the
Company's common stock with an exercise price equal to the then
fair market value of such shares.
Note 9 - Commitments and Contingencies
At September 30, 1995, the Company was committed under
noncancelable, operating leases for office space, automobiles
and office equipment, expiring at various dates through April
2000, requiring minimum rental payments as follows:
<TABLE>
<CAPTION>
Year Ending December 31:
<S> <C>
1995 (balance of year) $ 76,828
1996 295,016
1997 272,892
1998 142,295
1999 128,748
2000 40,744
$956,523
</TABLE>
Rental expense for the nine month periods ended September 30,
1995 and 1994 was $231,740 and $132,123 respectively, and for
the three month periods ended September 30, 1995 and 1994 was
$75,873 and $52,111 respectively.
Note 10 - Settlement Agreement
On August 30, 1995, the Company, Michael M. Smith, Gerard F.
Murphy, Fred Den and Louis Z. Weitz entered into a Settlement
Agreement which resolved a potential proxy contest threatened by
Messrs. Smith and Murphy in connection with the election of
directors at the 1995 Annual Meeting of Stockholders.
As part of the Settlement Agreement, the Company agreed to pay
all legal and accounting expenses related thereto. Legal
expenses amounted to $349,007 and accounting fees were $14,720.
Such expenses are included in Selling, General and
Administrative expenses.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
Reference is made to Item 6 - "Management's Discussion and
Analysis of Plan of Operation," contained in the Company's
Annual Report on Form 10-KSB for its year ended December 31,
1994 for a discussion of the Company's financial condition as of
December 31, 1994 including a discussion of the Company's
anticipated liquidity and working capital requirements during
1995.
COMPARISON OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER
30, 1995 TO THE THREE MONTHS ENDED SEPTEMBER 30, 1994
Only one month of operating results of Innovative Electronics,
Inc. (IEI), a subsidiary acquired in August of 1994, are
included in the consolidated financial statements for the three
months ended September 30, 1994 (see Note 2 to the Consolidated
Financial Statements).
Revenues for the three month period ended September 30, 1995,
were $2,172,093 compared to $1,581,484 for the comparable period
of 1994. This $590,609 (37.3%) increase was primarily due to an
increase in revenues from the new subsidiary (IEI), which
accounted for $500,804 or 84.8% of the total increase.
Excluding IEI revenues, ATS sales of equipment and systems were
$960,097 for the three months ended September 30, 1995 compared
to $952,329 for the comparable period of 1994 - an increase of
$7,768 (.8%).
ATS maintenance agreement revenue rose to $482,223 for the three
months ended September 30, 1995, an increase of $82,037 (20.5%)
over the comparable three months of 1994. This is attributable
to a larger number of systems under contract.
Cost of sales and service expenses increased from 39.0% of total
revenue for the three months ended September 30, 1994 to 41.0%
of total revenue for the comparable period of 1995. Cost of
equipment and systems increased from 40.7% of equipment and
system sales for the three months ended September 30, 1994 to
43.9% for the three months ended September 30, 1995 due to the
heavier weighting of IEI products which carries higher costs.
Maintenance costs declined from 34.7% to 33.3% due to a greater
number of less costly systems being under contract.
Selling, general and administrative expenses increased $581,789
(70.6%) to $1,406,309 for the three months ended September 30,
1995. Settlement Agreement referred to in Note 10 to the
consolidated financial statements amounted to $363,727
consisting of $349,007 in legal fees and $14,720 in accounting
fees. The operation of the new subsidiary (IEI) accounted for
$281,338 of the increase (three months 1995 vs. one month 1994).
Other ATS expenses decreased $63,276 (9.0%) due primarily to
lower professional fees paid to consultants.
Interest income was $5,369 for the three months ended September
30, 1995 compared to $839 for the comparable three months of
1994. This was attributable to both greater amounts invested
and higher yield.
Income taxes for the three months ended September 30, 1995,
amounted to $17,545 after applying current tax rates and
adjusting the cumulative effects of operating loss
carryforwards. The deferred tax benefit from utilizing the
balance of the operating loss carryforwards offset all of the
1994 liability and thus there was no tax provision for the three
months ended September 30, 1994.
As a result of the foregoing, the Company had a loss of $100,314
for the three months ended September 30, 1995 compared to net
income of $141,032 for the comparable three months of 1994.
COMPARISON OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1995 TO THE NINE MONTHS ENDED SEPTEMBER 30, 1994
Only one month of operating results of Innovative Electronics,
Inc. (IEI), a subsidiary acquired in August of 1994, are
included in the consolidated financial statements for the nine
months ended September 30, 1994 (see Note 2 to the Financial
Statements).
Revenues for the nine month period ended September 30, 1995,
were $6,067,514 compared to $3,735,702 for the comparable period
of 1994. This $2,331,812 (62.4%) increase was primarily due to
an increase in revenues from the new subsidiary (IEI) which
accounted for $1,763,640 or 75.6% of the total increase.
Excluding IEI revenues, ATS sales of equipment and sales were
$2,653,767 - an increase of 13.3% for the nine months ended
September 30, 1995 primarily due to the sale of new ATS-CP3000
Systems to a retail customer. ATS maintenance agreement revenue
rose to $1,414,896 - an increase of $257,318 over the comparable
nine months of 1994. This is attributable to a larger number of
systems under contract.
Cost of sales and service expenses declined from 41.8% of sales
and service revenues for the nine months of 1994 to 41.6% of
sales and service revenues for the comparable period of 1995.
Cost of ATS equipment and systems remained constant while ATS
maintenance costs declined from 40.8% of maintenance agreement
revenue for the nine month period ended September 30, 1994 to
36.9% of maintenance agreement revenue for the comparable period
of 1995 due to a greater number of less costly systems being
under contract. IEI products carry higher cost rates than ATS
in both periods.
Selling, general and administrative expenses increased
$1,358,535 (70.4%) to $3,288,125 for the nine months of 1995.
Of this increase, $903,289 (66.5%) is attributable to the
operation of the new subsidiary (IEI) and $363,727 is
attributable to the legal and accounting fees referred to in
Note 10 to the consolidated financial statements in relation to
the Settlement Agreement. Other ATS expenses increased $88,959
(4.9%) for the nine month period ended September 30, 1995
primarily in the area of salaries and commissions offset by less
professional fees paid to consultants.
Interest income was $21,303 for the nine month period ended
September 30, 1995 compared to $12,059 for the comparable
period of 1994. This was attributable to both greater amounts
invested and higher yield.
Income taxes for the nine months ended September 30, 1995,
amounted to $78,000 after applying current tax rates. The
deferred tax benefit from utilizing the balance of the operating
loss carryforwards offset all of the 1994 liability and thus
there was no tax provision through nine months ended September
30, 1994.
As a result of the foregoing, net income decreased $58,875 from
$255,186 for the nine month period ended September 30, 1994 to
$196,311 for the nine month period ended September 30, 1995.
Financial Condition
In March 1995, First Fidelity Bank, N.A., New Jersey approved a
$750,000 discretionary line of credit for the Company's
short-term needs, at an interest rate equal to such bank's base
rate plus 1/2%. All advances under this line of credit are
required to be secured by a lien on substantially all of the
Company's assets.
At September 30, 1995, cash and cash equivalents amounted to
approximately $430,000 and the Company did not have any
outstanding borrowings.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Amendments to the By-Laws of ATS Money Systems, Inc.
3.2 Amended and Restated By-Laws of ATS Money Systems, Inc.
11. Statement re: computation of per share earnings - Not
required since such computation can be clearly determined from
the material contained in this report on Form 10-QSB.
During the three months ended September 30, 1995, the Company
filed with the Securities and Exchange Commission (the
"Commission") three Current Report on Form 8-K (i) Current
Report on Form 8-K dated July 7, 1995 was filed with the
Commission on July 14, 1995 and an Amendment No. 1 and Amendment
No. 2 thereto were filed with the Commission on July 20, 1995 and
August 3, 1995, respectively, which reported changes in the
Registrant's certifying accountants, (ii) Current Report on Form
8-K dated August 4, 1995 was filed with the Commission on August
14, 1995 which reported the dismissal of Gerard F. Murphy as
President and Chief Executive Officer of the Registrant and the
appointment of Louis Z. Weitz as Chief Financial Officer and
Treasurer and (iii) Current Report on Form 8-K dated August 30,
1995 was filed with the Commission on September 1, 1995 which
reported a change in control of the Registrant and the execution
of a Settlement Agreement by and among the Registrant, Michael
M. Smith, Gerard F. Murphy, Fred Den and Louis Z. Weitz which
resolved a potential proxy contest in connection with the
election of directors at the Registrant's 1995 Annual Meeting of
Stockholders held on October 31, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ATS Money Systems, Inc.
(Registrant)
___________November 2,
1995____________ _________________________________
(Date) Gerard F. Murphy
Chief Executive Officer
President
___________November 2,
1995___________ _________________________________
(Date) Joseph M. Burke
Vice President - Finance
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet as of September 30, 1995 and the Consolidated
Statement of Operations for the nine months ended September 30, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 429,997
<SECURITIES> 0
<RECEIVABLES> 1,440,016
<ALLOWANCES> 142,705
<INVENTORY> 728,914
<CURRENT-ASSETS> 2,874,551
<PP&E> 144,702
<DEPRECIATION> 62,057
<TOTAL-ASSETS> 3,618,787
<CURRENT-LIABILITIES> 1,524,681
<BONDS> 0
<COMMON> 5,828
0
0
<OTHER-SE> 1,835,192
<TOTAL-LIABILITY-AND-EQUITY> 3,618,787
<SALES> 4,316,570
<TOTAL-REVENUES> 6,067,514
<CGS> 1,942,118
<TOTAL-COSTS> 2,526,381
<OTHER-EXPENSES> 3,805,188
<LOSS-PROVISION> 67,200
<INTEREST-EXPENSE> 21,303
<INCOME-PRETAX> 274,311
<INCOME-TAX> 78,000
<INCOME-CONTINUING> 196,311
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 196,311
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
EXHIBIT 3.1
AMENDMENTS TO THE BY-LAWS OF
ATS MONEY SYSTEMS, INC.
Article II, Section 1 of the Company's By-laws is amended to
read in its entirety as follows:
Section 1. Annual meetings of stockholders shall be held at
any location that the Board of Directors shall determine.
Special meetings of the stockholders may be held at such time
and place within or without the State of Nevada as shall be
stated in the notice of meeting, or in a duly executed waiver of
notice thereof.
Article II, Section 2 of the Company's By-laws is amended to
read in its entirety as follows:
Section 2. Annual meetings of stockholders shall be held on
any date and at any time as the Board of Directors shall
determine, at which they shall elect by a plurality vote a board
of directors, and transact such other business as may properly
be brought before the meeting.
Article III, Section 1 of the Company's By-laws is amended to
read in its entirety as follows:
Section 3. The number of directors shall be neither more than
seven nor less than three. The number of directors is to be
fixed either by the board of directors or by vote of the
shareholders. The directors shall be elected at the annual
meeting of the stockholders, and except as provided in Section 2
of this article, each director elected shall hold office until
his successor is elected and qualified. Directors need not be
stockholders.
EXHIBIT 3.2
ATS MONEY SYSTEMS, INC.
(FORMERLY KNOWN AS MORE CREATIVE MERGERS, INC.)
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B Y - L A W S
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ARTICLE I
OFFICES
Section 1. The principal office shall be in the City of Reno,
County of Washoe, State of Nevada.
Section 2. The corporation may also have offices at such other
places both within and without the State of Nevada as the board
of directors may from time to time determine or the business of
the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Annual meetings of the stockholders shall be held
at any location that the Board of Directors shall determine.
Special meetings of the stockholders may be held at such time
and place within or without the State of Nevada as shall be
stated in the notice of meeting, or in a duly executed waiver of
notice thereof.
Section 2. Annual meetings of stockholders shall be held on
any date and at any time as the Board of Directors shall
determine, at which they shall elect by a plurality vote a board
of directors, and transact such other business as any properly
be brought before the meeting.
Section 3. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or
by the articles of incorporation, may be called by the president
and shall be called by the president or secretary at the request
in writing of a majority of the board of directors, or at the
request in writing of stockholders owning a majority in amount
of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the
purpose or purposes of the proposed meeting.
Section 4. Notices of meetings shall be in writing and signed
by the president or a vice president, or the secretary, or an
assistant secretary, or by such other person or persons as the
directors shall designate. Such notice shall state the purpose
or purposes for which the meeting is called and the time when,
and the place, which may be within or without this state, where
it is to be held. A copy of such notice shall be either
delivered personally to or shall be mailed, postage prepaid, to
each stockholder of record entitled to vote at such meeting not
less than ten nor more than sixty days before such meeting. If
mailed, it shall be directed to a stockholder at his address as
it appears upon the records of the corporation and upon such
mailing of any such notice, the service thereof shall be
complete, and the time of the notice shall begin to run from the
date upon which such notice is deposited in the mail for
transmission to such stockholder.
Personal delivery of any such notice to any officer of a
corporation or association, or to any member of a partnership
shall constitute delivery of such notice to such corporation,
association or partnership. In the event of the transfer of
stock after delivery or mailing of the notice of and prior to
the holding of the meeting it shall not be necessary to deliver
or mail notice of the meeting to the transferee.
Section 5. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the
notice.
Section 6. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings
of the stockholders for the transaction of business except as
otherwise provided by statute or by the articles of
incorporation. If, however, such quorum shall not be present
or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 7. When a quorum is present or represented at any
meeting, the vote of the holders of a majority of the stock
having voting power present in person or represented by proxy
shall decide any questions brought before such meeting, unless
the question is one upon which by express provision of the
statutes or of the articles of incorporation a different vote is
required in which case such express provision shall govern and
control the decision of such question.
Section 8. Every stockholder of record of the corporation
shall be entitled at each meeting of stockholders to one vote
for each share of stock standing in his name on the books of the
corporation.
Section 9. At any meeting of the stockholders, any stockholder
may be represented and vote by a proxy or proxies appointed by
an instrument in writing. In the event that any such instrument
in writing shall designate two or more persons to act as
proxies, a majority of such persons present at the meeting, or,
if only one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument
upon all of the persons so designated unless the instrument
shall otherwise provide. No such proxy shall be valid after the
expiration of six months from the date of its execution, unless
coupled with an interest, or unless the person executing it
specifies therein the length of time for which it is to continue
in force, which in no case shall exceed seven years from the
date of its execution. Subject to the above, any proxy duly
executed is not revoked and continues in full force and effect
until an instrument revoking it or a duly proxy bearing a later
date is filed with the secretary of the corporation.
Section 10. Any action, except election of directors, which
may be taken by the vote of the stockholders at a meeting, may
be taken without a meeting if authorized by the written consent
of stockholders holding at least a majority of the voting power,
unless the provisions of the statutes or of the articles of
incorporation require a greater proportion of voting power to
authorize such action in which case such greater proportion of
written consents shall be required.
ARTICLE III
DIRECTORS
Section 1. The number of directors shall be neither more than
seven nor less than three. The number of directors is to be
fixed either by the board of directors or by vote of the
shareholders. The directors shall be elected at the annual
meeting of the stockholders, and except as provided in Section 2
of this article, each director elected shall hold office until
his successor is elected and qualified. Directors need not be
stockholders.
Section 2. Vacancies, including those caused by an increase in
the number of directors, may be filled by a majority of the
remaining directors though less than a quorum. When one or more
directors shall give notice of his or their resignation to the
board, effective at a future date, the board shall have power to
fill such vacancy or vacancies to take effect when such
resignation or resignations shall become effective, each
director so appointed to hold office during the remainder of the
term of office of the resigning director or directors.
Section 3. The business of the corporation shall be managed by
its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by
statute or by the articles of incorporation or by these by-laws
directed or required to be exercised or done by the stockholders.
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the
State of Nevada.
MEETINGS OF THE BOARD OF DIRECTORS
Section 5. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed
by the vote of the stockholders at the annual meeting and no
notice of such meeting shall be necessary to the newly elected
directors in order legally to constitute the meeting, provided a
quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of
the newly elected board of directors, or in the event such
meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be
specified in a written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be
held without notice at such time and place as shall from time to
time be determined by the board.
Section 7. Special meetings of the board of directors may be
called by the president or secretary on the written request of
two directors. Written notice of special meetings of the board
of directors shall be given to each director before the date of
the meeting
Section 8. A majority of the board of directors, at a meeting
duly assembled, shall be necessary to constitute a quorum for
the transaction of business and the act of a majority of the
directors present at any meeting at which a quorum is present
shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the articles of
incorporation. Any action required or permitted to be taken at
a meeting of the directors may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be
signed by all of the directors entitled to vote with respect to
the subject matter thereof.
COMMITTEES OF DIRECTORS
Section 9. The board of directors may, by resolution passed by
a majority of the whole board, designate one or more committees,
each committee to consist of one or more of the directors of the
corporation, which, to the extent provided in the resolution,
shall have and may exercise the powers of the board of directors
in the management of the business and affairs of the
corporation, and may have power to authorize the seal of the
corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the
board of directors.
Section 10. The committees shall keep regular minutes of their
proceedings and report the same to the board when required.
COMPENSATION OF DIRECTORS
Section 11. The directors may be paid their expenses, if any,
of attendance at each meeting of the board of directors and may
be paid a fixed sum for attendance at each meeting of the board
of directors or a stated salary as director. No such payment
shall preclude any director from serving the corporation in any
other capacity and are receiving compensation therefor. Members
of special or standing committees may be allowed like
compensation for attending committee meetings.
ARTICLE IV
NOTICES
Section 1. Notices to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or
stockholders at their addresses appearing on the books of the
corporation. Notice by mail shall be deemed to be given at the
time when the same shall be mailed. Notice to directors may
also be given by telegram.
Section 2. Whenever all parties entitled to vote at any
meeting, whether of directors or stockholders, consent, either
by a writing on the records of the meeting or filed with the
secretary, or by presence at such meeting and oral consent
entered on the minutes, or by taking part in the deliberations
at such meeting without objection, the doings of such meeting
shall be as valid as if
had at a meeting regularly called and noticed, and at such
meeting any business may be transacted which is not excepted
from the written consent or to the consideration of which no
objection for want of notice is made at the time, and if any
meeting be irregular for want of notice or of such consent,
provided a quorum was present at such meeting, the proceedings
of said meeting may be ratified and approved and rendered
likewise valid and the irregularity or defect therein waived by
a writing signed by all parties having the right to vote at such
meetings; and such consent or approval of stockholders may be by
proxy or attorney, but all such proxies and powers of attorney
must be in writing.
Section 3. Whenever any notice whatever is required to be
given under the provisions of the statutes, of the articles of
incorporation or of these by-laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by
the board of directors and shall be a president, a vice
president, a secretary and a treasurer. Any person may hold two
or more offices.
Section 2. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a president, a
vice president, a secretary and a treasurer, none of whom need
be a member of the board.
Section 3. The board of directors may appoint additional vice
presidents, and assistant secretaries and assistant treasurers
and such other officers and agents as it shall deem necessary
who shall hold their offices for such terms and shall exercise
such powers and perform such duties as shall be determined from
time to time by the board.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section. 5. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer
elected or appointed by the board of directors may be removed at
any time by the affirmative vote of a majority of the board of
directors. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise shall be
filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer
of the corporation, shall preside at all meetings of the
stockholders and the board of directors, shall have general and
active management of the business of the corporation, and shall
see that all orders and resolutions of the board of directors
are carried into effect.
Section 7. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation,
except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof
shall be expressly delegated by the board of directors to some
other officer or agent of the corporation.
THE VICE PRESIDENT
Section 8. The vice president shall, in the absence or
disability of the president, perform the duties and exercise the
powers of the president and shall perform such other duties as
the board of directors may from time to time prescribe.
THE SECRETARY
Section 9. The secretary shall attend all meetings of the
board of directors and all meetings of the stockholders and
record all the proceedings of the meetings of the corporation
and of the board of directors in a book to be kept for that
purpose and shall perform like duties for the standing
committees when required. He shall give, or cause to be given,
notice of all
meetings of the stockholders and special meetings of the board
of directors, and shall perform such other duties as may be
prescribed by the board of directors or president, under whose
supervision he shall be. He shall keep in safe custody the seal
of the corporation and, when authorized by the board of
directors, affix the same to any instrument requiring it and,
when so affixed, it shall be attested by his signature or by the
signature of the treasurer or an assistant secretary.
THE TREASURER
Section 10. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the corporation in such
depositories as may be designated by the board of directors.
Section 11. He shall disburse the funds of the corporation as
may be ordered by the board of directors taking proper vouchers
for such disbursements, and shall render to the president and
the board of directors, at the regular meetings of the board, or
when the board of directors so requires, an account of all his
transactions as treasurer and of the financial condition of the
corporation.
Section 12. If required by the board of directors, he shall
give the corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the
restoration to the corporation, in case
of his death, resignation, retirement or removal from office, of
all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging
to the corporation.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every stockholder shall be entitled to have a
certificate, signed by the president or a vice president and the
treasurer or an assistant treasurer, or the secretary or an
assistant secretary of the corporation, certifying the number of
shares owned by him in the corporation. When the corporation is
authorized to issue shares of more than one class or more than
one series of any class, there shall be set forth upon the face
or back of the certificate, or the certificate shall have a
statement that the corporation will furnish to any stockholders
upon request and without charge, a full or summary statement of
the designations, preferences and relative, participating,
optional or other special rights of the various classes of stock
or series thereof and the qualifications, limitations or
restrictions of such rights, and, if the corporation shall be
authorized to issue only special stock, such certificate shall
set forth in full or summarize the rights of the holders of such
stock.
Section 2. Whenever any certificate is countersigned or
otherwise authenticated by a transfer agent or transfer clerk,
and by a registrar, then a facsimile of the signatures of the
officers
or agents of the corporation may be printed or lithographed upon
such certificate in lieu of the actual signatures. In case any
officer or officers who shall have signed, or whose facsimile
signature or signatures shall have been used on, any such
certificate or certificates shall cease to be such officer or
officers of the corporation, whether because of death,
resignation or otherwise, before such certificate or
certificates shall have been delivered by the corporation, such
certificate or certificates may nevertheless be adopted by the
corporation and be issued and delivered as though the person or
persons who signed such certificate or certificates, or whose
facsimile signature or signatures shall have been used thereon,
had not ceased to be the officer or officers of such corporation.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate
or certificates to be issued in place of any certificate or
certificates therefore issued by the corporation alleged to have
been lost or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificates of stock to be lost
or destroyed. When authorizing such issue of a new certificate
or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require
the owner of such lost or destroyed certificate or certificates,
or his legal representative, to advertise the same in such
manner as it shall require and/or give the corporation a bond in
such sum as it may direct as indemnity against any claim that
may be made against the corporation with respect to the
certificate alleged to have been lost or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction
upon its books.
CLOSING OF TRANSFER BOOKS
Section 5. The directors may prescribe a period not exceeding
sixty days prior to any meeting of the stockholders during which
no transfer of stock on the books of the corporation may be
made, or may fix a day not more than sixty days prior to the
holding of any such meeting as the day as of which stockholders
entitled to notice of and to vote at such meeting shall be
determined; and only stockholders of record on such day shall be
entitled to notice or to vote at such meeting.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the
corporation, subject to the provisions of the articles of
incorporation, if any, may be declared by the board of directors
at any regular or
special meeting pursuant to law. Dividends may be paid in cash,
in property, or in shares of the capital stock, subject to the
provisions of the articles of incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for
dividends such sum or sums as the directors from time to time,
in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to
the interest of the corporation, and the directors may modify or
abolish any such reserves in he manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such
other person or persons as the board of directors may from time
to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed
by resolution of the board of directors
SEAL
Section 5. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its incorporation and the
words "Corporate Seal, Nevada."
ARTICLE VII
AMENDMENTS
Section 1. These by-laws may be altered or repealed at any
regular meeting of the stockholders or of the board of directors
or at any special meeting of the stockholders or of the board of
directors if notice of such alteration or repeal be contained in
the notice of such special meeting.
